Durham's Heat Biologics Slashes 22% of Workforce and Cuts Execs' Pay to Conserve Cash
Published: Apr 07, 2016
April 7, 2016
By Alex Keown, BioSpace.com Breaking News Staff
DURHAM, N.C. – Cost saving measures and a new corporate strategy are reasons behind North Carolina-based Heat Biologics, Inc.’s slashing 22 percent of the company’s workforce.
Heat Biologics, an immune-oncology company, announced the cuts this morning, along with a reduction in compensation for the remaining company leadership team. Additionally, two members of the company’s board of directors voluntarily resigned their seats, Heat said. Heat is using its resources to focus on important near-term milestones for two of its drug candidates, HS-410 and HS-110. Jeff Wolf, founder and chief executive officer of Heat Biologics, called the cost-cutting measures difficult, but necessary.
“We remain committed to advancing our lead clinical program for HS-410 and the focused reductions announced today extend our cash runway to reach significant inflection points expected later this year,” Wolf said in a statement.
The company did not say how many positions were affected by the job cuts, nor how many employees the company would maintain. Heat also did not identify the two board members who stepped down in the press release.
Heat intends to throw the bulk of its resources behind its lead product, HS-410, which is being developed for the treatment of non-muscle invasive bladder cancer. HS-410 is designed to generate CD8+ “killer” T cells that attack cancer cells.
In February the U.S. Food and Drug Administration lifted a partial hold on the Phase II trial for HS-410. The trial was valuating HS-410 either alone or in combination with standard of care Bacillus Calmette-Guérin (BCG), for the treatment of non-muscle invasive bladder cancer (NMIBC). When the hold was lifted in February, Heat said it planned to resume patient enrollment in the trial, although enrollment was later stopped due to issues with the availability of the standard-of-care Bacillus Calmette-Guerin. The FDA put the trial on hold after Heat reported to the regulatory body the cell line on which HS-410 is based had been previously misidentified. Patients already enrolled in the trial continued to receive treatment while the hold was in place, Heat said in February.
Another cost-cutting measure the company announced involved its experimental drug aimed at treating non-small cell lung cancer. Heat Biologics said it will proceed with a smaller Phase Ib trial evaluating its lung cancer drug, HS-110, than originally planned. Heat will proceed with a trial for eight patients, rather than the 18 it had initially planned. HS-110 utilizes modified lung cancer cells to stimulate an immune system response to activate T cell responses against antigens known to be expressed by a high proportion of patients with NSCLC, the company said.
Heat said it anticipates topline data from these two trials in the fourth quarter of 2016.
Heat Biologics has struggled this year in raising financing. In March, the company raised $6.8 million from the offering of 9 million shares of common stock from the offering of 9 million shares of common stock, which was far less than the company wanted to raise. The company had lofty goals of raising about $12.5 million from the sale of the shares in order to support a Phase II clinical trial for HS-410, according to a report in the Raleigh-based News & Observer. Shares of Heat biologics have shown a steady decline over the past year, falling from a high of $8.35 per share in April 2015 to today’s opening price of 66 cents per share.